About that projected $8 billion budget deficit, Governor…

How much does John Kasich’s State budget introduced today cut State general revenue spending from its current levels under Governor Strickland’s last budget?:

A) Around $8 billion.

B) Around $10 billion.

C) Around $2 billion.

D) It actually INCREASES State general revenue spending by 10%.

Answer after the jump.

Okay, the fact that I went through the trouble of making this a multiple-choice question probably made you realize that the obvious answer A) couldn’t possible be correct because why would I write such an obviously simply question with such an obvious answer.

And you’d be correct. The actual answer, believe it or not, is D. Strickland cut $2 billion in the State’s General Revenue Fund spending in the last budget, but the all funds (which besides the GRF includes mostly passthru federal and other revenues that pass through the State to local government entities, etc.) went up. During the campaign, Kasich mocked Strickland for promoting his fiscally conservative budget and suggest that a $2 billion cut in general revenue funds was inadequate. According to GONGWER, Kasich’s budget increases GRF spending by $5 billion, a 10% increase over Strickland. Ohio has never spent more GRF money than it will under Kasich’s budget!

So how did Kasich “balance our budget.” Well, first, I’d like to point out that on pg A-22 of the Governor’s Blue Book, in the FAQ section:

No budget deficit.

Anyways, Kasich “balances” his budget by taking money away from local government and schools. Don’t believe me? Here’s a chart on pg. B-6 of the Blue Book:

Kasich raids money from the Commercial Activities Tax that was allocated to paying for a reimbursement to local governments and schools who are losing out on revenues from Ohio’s abolishment of the tangible property tax. The reimbursements were gradually being phased out to give these entities time to adjust to the loss of revenues. Pretty much the same deal with MCF (natural gas tax) and the Kilowatt Tax (KWH). (Here’s a great primer on the last two replacement taxes written by Gov. Strickland’s Tax Commissioner just back in December.)

Kasich “accelerates” the phase out of these replacement revenues by denying them to the intended entities and diverting them into the GRF. That’s called “raiding,” not reform. This helps Kasich generate $1.3 BILLION dollars in “new” revenues for the General Revenue Fund for Kasich’s budget.

Kasich then cuts the Local Government fund a little over half a billion. He then subjects K-12 school funding in roughly 16% in funding cuts. Add that to the above and the cuts to libraries, and Kasich gets 1/4 of the way there to balancing the budget.

School funding cuts get another $1.28 billion to the mix. Higher education gets another $300 million. Together, and Kasich is almost half way there.

However, the total amount that school districts get drops by 11.5 percent in 2012, and 4.9 percent in 2013. That adds up to a drop of $3.14 billion over both years combined — a sum that includes the loss from the tax policy changes as well as the loss of federal stimulus funds used to prop up the current budget.

And yet, Kasich hacks are trying to desperately trying to argue that this budget increases education funding. Pathetic.

Thanks for your budget analysis, Modern. It’s hard to trust daily newspaper reporters anymore so I’m glad someone else is also doing the work. I’m confused about one thing though. In one paragraph you say, ” He then subjects K-12 school funding in roughly 16% in funding cuts.” In the next you say, “School funding cuts get another $1.28 billion to the mix.” Can you differentiate between these two pots of money being decreased?

Xx

Funny thing about that commercial activity tax, it is the one I hear most small businesses complain about the most.